HQ 0556191 - Applicability of duty exemption under U.S. Note 2(b), subchapter II, Chapter 98, HTSUS, to footwear uppers produced in Caribbean Basin Initiative countries; 555742, 555788, T.D. 91-88 - United States International Trade Commision Rulings

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HQ 556191

November 26, 1991

CLA-2 CO:R:C:S 556191 LS

CATEGORY: CLASSIFICATION

Mr. Kenneth H. Keefe
Sandler, Travis & Rosenberg, P.A.
The Waterford
5200 Blue Lagoon Drive
Miami, Florida 33126-2022

RE: Applicability of duty exemption under U.S. Note 2(b), subchapter II, Chapter 98, HTSUS, to footwear uppers produced in Caribbean Basin Initiative countries; 555742, 555788, T.D. 91-88

Dear Mr. Keefe:

This is in response to your letter dated August 7, 1991, on behalf of Stride Rite Corporation, requesting a ruling on the eligibility for duty-free treatment under U.S. Note 2(b), subchapter II, Chapter 98 of the Harmonized Tariff Schedule of the United States (HTSUS), of footwear uppers produced in Caribbean Basin Initiative (CBI) countries. You also request a ruling as to whether the footwear uppers must be marked with the name of the CBI country, in accordance with the country of origin marking requirements applicable to articles of foreign origin. The latter issue will be reviewed and addressed by the Value and Marking Branch in a separate response.

FACTS:

Stride Rite Corporation plans to manufacture and/or assemble "Kudu" style closed bottom footwear uppers in CBI countries from components, materials, and ingredients, all of U.S. origin. You claim that the footwear uppers are entitled to duty-free treatment under U.S. Note 2(b), subchapter II, Chapter 98, HTSUS, when they are imported into the U.S.

You further state that the closed bottom uppers are made of leather and that they may be imported into the U.S. with or without leather sock linings, also of U.S. origin and already inserted into the footwear uppers.

ISSUE:

Whether the footwear uppers are eligible for duty-free treatment under U.S. Note 2(b), subchapter II, Chapter 98, HTSUS.

LAW AND ANALYSIS:

Section 222 of the Customs and Trade Act of 1990 (P.L. 101- 382) amended U.S. Note 2, subchapter II, Chapter 98, HTSUS (hereinafter "Note 2(b)") to provide for duty-free treatment of articles (except textile and apparel articles, petroleum, and certain products derived from petroleum), which are assembled or processed in a Caribbean Basin Initiative beneficiary country (BC) wholly of fabricated components or ingredients (except water) of U.S. origin. This amendment was effective with respect to goods entered on or after October 1, 1990.

In Headquarters Ruling Letter (HRL) 555742 dated November 5, 1990, and HRL 555788 dated September 9, 1991, we held that footwear and parts of footwear, e.g., footwear uppers, are not considered textile or apparel articles and, therefore, are eligible for duty-free treatment under Note 2(b). We further note that in T.D. 91-88 dated October 18, 1991, we determined that footwear and parts of footwear, made at least in part of textile materials, are eligible articles under Note 2(b), regardless of whether they are subject to textile agreements.

HOLDING:

In accordance with the above referenced rulings, we find that the "Kudu" style footwear uppers manufactured and/or assembled in BCs wholly of U.S. origin components and ingredients are entitled to duty-free treatment under Note 2(b), provided (1) they do not enter the commerce of any foreign country, other than a BC, before importation into the U.S., and (2) the applicable documentation requirements set forth in Headquarters telex 9264071 dated September 28, 1990 (copy enclosed), are satisfied.

Sincerely,

John Durant, Director
Commercial Rulings Division

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